North Carolina’s attorney general has joined the Consumer Financial Protection Bureau and six other attorneys general in filing a lawsuit against a company accused of running an illegal debt-relief scheme.
Attorney General Josh Stein said Strategic Financial Solutions collected hundreds of millions of dollars in illegal fees from unsuspecting people who wanted help with their debts.
Since at least 2016, Stein said SFS has run a scheme that appears to help people by reaching reduced settlements with their creditors. However, they are told they don’t qualify for a loan and are pitched a debt settlement program instead.
The consumers are then referred to a “law firm” that typically has only one or two licensed attorneys to handle thousands of clients, and the attorneys perform little work.
The A-G said SFS’ customers are told to stop paying their creditors and make monthly payments to a “trust account” instead – and then collect exorbitant advance fees, which makes it almost impossible for customers to save enough money to settle their debts.
